Where to buy chocolate ?: A Comparative Analysis of Chocolate Markets in Harvard Square

Chocolate uniquely embodies a number of contradictions. It’s almost universal, yet very personal. Consistent, yet incredibly diverse. Sweet, yet bitter. Luxurious and expensive, yet cheap and ubiquitous. Valentine’s day for adults, halloween for children—there is a chocolate for everyone. Considering all the different profiles and qualities that chocolate has taken on in its millennia-long history, it follows that there are a number of establishments consumers can go to in order to enjoy this versatile treat. Walking through Harvard Square, one can find themselves at any of the three main purveyors of chocolate—each of which carries its own unique implications, connotations, and ‘personality.’

The first such setting is perhaps best characterized by convenience, and in the context of Harvard Square, there is no store more convenient than CVS (so convenient that, not long ago, there were three within a one block radius of each other). Though technically a pharmacy, most CVS locations are better known for their general merchandise, including everything from toiletries to convenience foods. With its vast and diverse offerings, and over 9,800 stores across the United States, CVS is the epitome of a chocolate purveyor to the masses. That is, similar to grocery stores or large chain supermarkets such as Walmart, Stop & Shop, or Kroger, which is where the majority turn to for confectionary purchases (IBISWorld). That being said, chocolate is far from the focal point of these stores.

Figure 1

Just across the street from CVS, one may find themselves at Cardullo’s Gourmet Shoppe, which is representative of a different type of setting for buying chocolate, perhaps best described as ‘specialty stores.’ Cardullo’s in particular offers an array of fresh foods and gourmet delicacies from around the world, including wine, cheese and, of course, chocolate. There are a number of other stores nearby (and across the country) with a similar premise as Formaggio Kitchen or Bacco Wine & Cheese, where chocolate is not necessarily the focus or the sole product featured, but the food categories offered are still limited. Consequently, each such category is theoretically given more ‘weight’ in how important it is to the store. This specialization also carries the implication that the products offered are carefully/deliberately curated, and are of high quality.

The last stop on this chocolate journey through Harvard Square brings us to L.A. Burdick, which takes specialization to the next level. At L.A. Burdick, one can find themselves in a chocolate heaven of Larry Burdick’s creations, which is the clear and primary focus of the establishment. Other such stores in the greater Boston area may include the Teuscher Chocolates of Switzerland, Beacon Hill Chocolates, and EHChocolatier, representing the most niche of the three main ‘purchasing settings’ as they all primarily sell gourmet chocolate goods of their own creation.

The differences between these purveyors could not be more stark and yet they are all places consumers go to buy chocolate. Their various focal points and priorities are reflected in their respective selections, pricing, sourcing, and messaging.

Variety

Walking through the ‘Candy’ and ‘Chocolate’ aisle at CVS, one is immediately struck by the bold, bright colored packaging that marks almost all of their chocolate products. As displayed below, many of these are variations of the big name chocolate candy bars/treats that pervade the US such as Kit Kat, M&M’s and Reese’s Cups. But perhaps the first thing to note about the CVS chocolate section is how the overwhelming majority are more candy bar than actual chocolate. That is, there is a limited selection of primarily chocolate-based products (those with few additional ingredients such as caramel or ‘fruit & nut’), even fewer options for plain milk chocolate (four to be exact, of which three are owned by the same parent company), and only three options for dark chocolate. In a separate aisle, however, there is a stand for what CVS labels “Premium Chocolates,” where they have three additional labels with a ‘pure’ chocolate option—Ghirardelli, Lindt, and Endangered Species. Ghirardelli and Lindt both have multiple choices for cacao percentage (they are also owned by the same parent company).

The variety of chocolates at CVS is relatively new phenomenon that reflects the evolving tastes of American consumers. Indeed, “American consumers are expanding their consumption beyond traditional mass market chocolate such as Hershey”s” (Squicciarini & Swinnen). That being said, this notion of variety can be misleading considering that around 80% of the 45+ chocolate products found in these sections at CVS are owned/distributed by just 4 corporations, half of which are Hershey products and the other half of which are Mars, Lindt, and Ferrero products (Ferrero acquired Nestlé’s U.S. chocolate business in 2018). The selection at CVS mirrors U.S. overall market share, with these four companies controlling just about 80% of the market (Wilmot & Back). Indeed, large scale deals between retail chains like CVS and chocolate conglomerates likely perpetuate the dominance of these companies’ products in the chocolate market. Thus while the amalgam of packaging colors, shapes, and sizes may give the impression of diversity, it becomes clear that most of the chocolate and brand variety is superficial with the only differentiator being the flavoring.

Figure 3: Just four companies control about 80% of the overall chocolate market share, which mirrors the selection variety at CVS.

Compare this to Cardullo’s Gourmet Shoppe—a family-owned, local specialty store that’s been at the heart of Harvard Square for nearly 70 years and it’s a completely different story. While they still have their fair share of ‘industrial chocolate’ varieties, i.e. “mass-produced confections [that] are intended to guarantee a consistent smell and taste, achieved through rigorous oversight and a careful blending of cacaos” (Sethi), it’s the relative variety of craft chocolate brands that leaves the greatest impression upon arriving at their designated chocolate and dessert sections. With their selection including around 15 companies producing craft chocolate who specialize solely in chocolate production, it’s easy to get a hint of the diversity in the market—as well as in taste.

Figure 4: Portion of industrial chocolate available at Cardullo’s

Moreover, within their rather vast chocolate selection, there are two columns that, at first glance, may be reminiscent of CVS’s offerings in terms of its colorful packaging and familiar brands (see Figure 4). Upon further inspection however, their place at Cardullo’s becomes evident. While chocolates in this section are indeed of the ‘industrial’ variety, they are included at Cardullo’s because the brands or country of origin are uncommon for the U.S. For example, Figure 5 illustrates that the Kit Kat at Cardullo’s has an origin and branding difference—the Cardullo’s version is manufactured by Nestlé, as is the case for all Kit Kats outside the US, while the U.S. version is made under license by a division of The Hershey Company.

Figure 5: Left side is Kit Kat sold at CVS, right side is that sold at Cardullo’s

Such differences have notable implications for the chocolate itself, which trace back to around the 1930s when the “process of manufacturing chocolate was gradually shifting from improvisation to exact science as manufacturers experimented with various ways to render the essence from roasted cocoa beans. No two companies employed the same practices […] Each process produced its own unique flavor, and over time, these differences translated into distinct national tastes” (Brenner 63). In the case of a Kit Kat for instance, the European version contains less sugar and a higher cocoa and fat content than its American counterpart. This national preference has even gone as far as affecting legislation such that in the UK a product is required to be at least 25% cocoa solids in order to be called milk chocolate, whereas in the US such a designation requires only that it contain a minimum of 10% chocolate liquor (Spector).

Unlike Cardullo’s and CVS, L.A. Burdick sells all its chocolate under its own brand name. It is a charming store that specializes in chocolate creations of all forms. Here, one finds a very different kind of variety wherein all of the chocolate is made from, and branded as, the same source (i.e. L.A. Burdick), but there are numerous varieties with different shapes, sizes, types, flavorings, consistencies, etc. Specifically, they offer a number of regular and themed “collections” or assortments featuring different combinations of their 36+ truffle and bonbon varieties. While some of these, usually those that are on the smaller side such as their “Chocolate Bee Collection” are displayed for purchase in the shop, the majority are available to order online as customizable gifts or for a range of special events. In the physical store, however, there is also the option to purchase several of their bonbons and truffles on an individual basis. Alongside these delicacies, they also sell chocolate-covered nuts and dried fruits, an impressive collection of more conventional chocolate bars, as well as an array of (mostly) chocolate pastries and confections. Considering these products are all made under the same name, the extent of their chocolate bar collection is particularly noteworthy: they offer 18 varieties covering a range of cacao percentages, flavorings/added ingredients, and cacao bean origin. Throughout the store there are also a handful of artfully crafted, intricate chocolate creations (e.g. Rocher nest), with one even explicitly labeled as ‘display only,’ further emphasizing the blurry line between these artisanal chocolates and art. Lastly, and perhaps most popular, is their variety of drinking chocolate options. This includes three standard drink preparations in addition to a ‘single source dark chocolate’ option, whose source rotates every month among seven different locations, each with a specific and unique flavor profile that they detail on their menu.

Quality

Quality is perhaps one of the most cited traits in chocolate, but it is also one of the most ambiguous. Depending on who you ask, quality in chocolate can refer to any number of traits–be it the cacao plant variety or origin, the maker, the consistency, the taste, the process, or even the brand. Indeed, perceptions of quality vary country by country and are often reflective of the level of a country’s economic development. Cidell and Alberts found that “quality is based on material characteristic whose relative importance in determining quality depends on the country in which different stages of economic innovation took place.” Different producers catering to different audiences tend emphasize different things with the mass market producers we tend to find at CVS emphasizing taste, consistency and lifestyle elements (think “Have a break. Have a Kit Kat”). The smaller capacity chocolate makers we find at Cardullo’s (and potentially L.A. Burdick), on the other hand, emphasize the handmade nature, small production runs, ‘pure’ ingredients and natural tastes.

There are real differences between brands of chocolate, though the effect of those differences on the esoteric notion of quality is up for debate. For example, soy lecithin is used in the majority of chocolate products as a surfactant, meaning it lowers the viscosity of the chocolate during the production process, thereby making it easier to work with for tempering and molding. While the same can be achieved by adding more cocoa butter, this is a lot more expensive as well as more time consuming as it requires a longer period of conching (Terenzi, Chess). As a result, many of the mass produced chocolates—including all of those sold at CVS employ the former process and ingredients. The chocolates at Cardullo’s tend to communicate their quality through a varied selection of single-origin bars, thereby suggesting the use of high-quality beans and/or specialty cacao which subscribes to “a notion of quality that is linked to lack of defects and the presence of fine flavor and aroma(s)” (Martin). Similarly, they imply that an “artisanal” approach to chocolate-making leads to a higher quality product—though this is not necessarily as straightforward as it may seem since the term has no standardized implication for their cacao bean sourcing or production practices. Rather, it can be more a marketing effort to increase perceived quality. On the other hand, Cardullo’s does carry some mass produced well-branded chocolates as well with dubious quality relative to their price. For example, Valrhona, Neuhaus and Godiva, all carried by Cardullo’s, have extremely strong reputations and consumer perceptions of quality, yet all contain soy lecithin and other additives in their dark chocolate products (on the other hand, Cardullo’s was the only store visited to carry some chocolate bars with just cocoa constituents and cane sugar—all of L.A. Burdick’s bars contain the ingredient). One area where consumers can gain real insight into the chocolates at Cardullo’s are the bean to bar varieties—while these chocolates are not guaranteed to be good, this increases the likelihood that the cacao is deliberately sourced as opposed to using bulk commodity cacao.

I would be remiss if, in a discussion of quality, I ignored the significant role that marketing and branding have on perceived quality, regardless of the actual ingredients, tastes, origins, etc. of the chocolate. Indeed, consumer information is imperfect and, as with wines, the majority of consumers tend to rely on factors like brand reputation, package appearance, cacao percentage, and, of course, price. Many of L.A. Burdick’s chocolates, though sold at a specialty store under a specialty brand, lack complete transparency as to their origins and are, in fact, private labeled chocolates made by other companies (potentially some of the same companies that make lower cost chocolate for stores like CVS). There are infinite ways to define quality in chocolates and most would agree the chocolates at Cardullo’s are of “higher quality” than those at CVS, but that is not universally true and the processes and ingredients used to deride more mass market chocolates can still find themselves in the ‘higher end’ line up of specialty shops like Cardullo’s. Unsurprisingly, CVS’s selection doesn’t stand out on the quality front—the majority of their chocolate options are in the form of candy bars, which were historically designed with the express purpose of using cheaper ingredients under the guise of a chocolate product, which in pn packaging would appear comparable in size to a plain chocolate bar (Lecture, The Rise of Big Chocolate).

Price

The difference in cost between these three distinct chocolate purveyors is a little more straightforward in that, unsurprisingly, there is a linear, upward trajectory of sale price as the stores become more specialized. As the stores became more expensive, their range of prices also grew significantly, with L.A. Burdick’s, the most expensive store, having the largest gulf between its lowest cost and highest cost products. In discussing pricing however, it is important to consider the fact that it’s not only a function of the cost of the product—though that is an important consideration—but also a deliberate marketing and brand positioning decision. That being said, in the stores considered here, there is a difference in the underlying cost of producing the chocolate products that correlates with their final price. The chocolates sold at CVS, made in large manufacturing facilities targeted at the mass market, and often with bulk commodity cacao, are cheaper because such processes and resources cost less per product. On the other hand, some of the options at Cardullo’s were largely higher priced because they were made in smaller batches, used more manual or time-consuming processes and/or employed more expensive (and fewer) ingredients—as an example, Dick Taylor’s single-origin dark chocolates only have two ingredients (i.e. cacao and cane sugar) (Abesamis). Such craft chocolates often exist at “a disadvantage to the bulk, industrial market, as they often operate along lines less traditional to capitalist production” (Martin), but make up for this disadvantage by positioning their brands as premium products deserving of a higher price point.

Perception and branding is another extremely powerful driver of pricing (Lybeck, et al.). Consumers often associate specialty shops with artisan-like quality and higher prices, just as they might believe a dedicated butcher shop has higher quality meats than the butcher at a supermarket. The same phenomenon plays out in the stores that I visited, with the most specialized store, L.A. Burdick, having higher priced chocolates than Cardullo’s even though it is unclear if the underlying cost or quality of the chocolates each sells is as different. The premium at L.A. Burdick is placed on the perceived additional care a specialty shop would put into their product because, after all, it’s the only product they sell. L.A. Burdick’s website emphasizes this care (and the associated costs) when they emphasize the “hand-made” elements, even though there is likely no discernible difference between a hand-packed and machine-packed high quality chocolate: “each artisan bonbon is hand-cut or shaped, hand-garnished, hand-finished, and hand-packed” (“Chocolate Assortments”).

Takeaway: Intended Audience

Much of the reasoning behind the decisions described above, from product selection to pricing strategy, boil down to their respective target audience/consumer. As such, there is no ‘better’ place to buy chocolate (as far as chocolate for chocolate’s sake goes, this can be a different story with respect to ethical considerations), but rather the right place to suit your specific wants and needs. This is indeed reflected in the variety, quality, and cost of their respective selections. That is, at CVS, nearly everything from their chocolate options and placement in store to their pricing strategy screams convenience, accessibility, and a focus on impulse purchases (the majority of their chocolate selection is scattered by the registers and self-checkout stations) making it no secret that their chocolate selection is not a priority—nor should it be. Rather, open 24/7 in a college town with busy students and professionals, CVS is appealing to the average consumer. Specifically, it relies on those who go there for convenience because in addition to its uninterrupted hours, it’s an established, nationwide brand where people know they can go to find a little bit of everything. In this vein, it wouldn’t even make sense for CVS to offer more exclusive (and by extension, more expensive) options as they’re not targeting consumers with the deliberate intention of buying chocolate, but rather as an add-on to toothpaste at the register, a last minute ‘get well soon’ gift, or a quick snack. The other shops, however, can be destinations where consumers often come in with strong chocolate purchasing intent.

Thus while these three purveyors differ significantly in their stocking, quality and pricing strategy when it comes to chocolate, they each fill a large desire for their respective products. Indeed, their coexistence and success in different parts of the market is emblematic of the versatile role chocolate plays in our society—one that can be a low-cost treat, a delicacy, a consolation gift or an expression of love.

Works Cited

Abesamis, Abigail. “What’s Fancy Chocolate Made Of That Makes It So Expensive?” HuffPost Life, HuffPost News, 28 Aug. 2018, http://www.huffingtonpost.ca/entry/fancy-chocolate-expensive_n_5b7d8c4de4b07295150f25c6.

Amir, Anna. “Industry Report 31135: Chocolate Production in the US.” IBISWorld, IBISWorld, Feb. 2019, clients1.ibisworld.com/reports/us/industry/default.aspx?entid=230.

Berger, Jonah, et al. “The Influence of Product Variety on Brand Perception and Choice.” Marketing Science, vol. 26, no. 4, 1 July 2007, pp. 460–472., doi:10.1287/mksc.1060.0253.

Brenner, Joel Glenn. “Chapter Five: To the Milky Way and Beyond.” The Emperors of Chocolate: Inside the Secret World of Hershey and Mars, Broadway Books, 2000, pp. 49–69.

Chess, Kate. “Soy-Free Chocolate.” The Equal Exchange Blog, Equal Exchange, 28 Sept. 2018, blog.equalexchange.coop/soy-free-chocolate/.

“Chocolate Assortments.” L.A. Burdick Handmade Chocolate, L.A. Burdick Chocolate, http://www.burdickchocolate.com/chocolate-assortments.aspx.

Chocolate Industry Analysis 2018 – Cost & Trends, FranchiseHelp, 2018, http://www.franchisehelp.com/industry-reports/chocolate-industry-analysis-2018-cost-trends/.

Cidell, Julie L., and Heike C. Alberts. “Constructing Quality: The Multinational Histories of Chocolate.” Geoforum, vol. 37, no. 6, 2006, pp. 999–1007., doi:10.1016/j.geoforum.2006.02.006.

Lybeck, Annika, et al. “Store Brands vs. Manufacturer Brands: Consumer Perceptions and Buying of Chocolate Bars in Finland.” The International Review of Retail, Distribution and Consumer Research, vol. 16, no. 4, 2006, pp. 471–492., doi:10.1080/09593960600844343.

Martin, Carla D. “Sizing the Craft Chocolate Market.” Fine Cacao and Chocolate Institute (Blog), 31 Aug. 2017, chocolateinstitute.org/blog/sizing-the-craft-chocolate-market/.

Martin, Carla D. “The Rise of Big Chocolate and Race for the Global Market.” Chocolate, Culture, and the Politics of Food. 13 Mar. 2019, Harvard University: Cambridge, MA, Harvard University: Cambridge, MA.

Sethi, Simran. “What Separates ‘Craft’ from Industrial Chocolate? It’s about Diversity.” The Washington Post, WP Company, 8 Feb. 2017, http://www.washingtonpost.com/lifestyle/food/the-elusive-qualities-that-separate-craft-from-industrial-chocolate/2017/02/07/1e5452a8-ecb8-11e6-b4ff-ac2cf509efe5_story.html?utm_term=.0c7775ef6e2c.

Spector, Dina. “Why British And American Chocolate Taste Different.” Business Insider, Business Insider, 27 Jan. 2015, http://www.businessinsider.com/why-british-and-american-chocolate-taste-different-2015-1.

Squicciarini, Mara, and Johan Swinnen. Economics of Chocolate. Oxford Univ Press, 2016.

Terenzi, Sharon. “Soy Lecithin in Chocolate: Why Is It So Controversial?” The Chocolate Journalist, 9 Oct. 2018, thechocolatejournalist.com/soy-lecithin-chocolate/.

Wilmot, Stephen, and Aaron Back. “Are Americans Falling Out of Love With Chocolate?” The Wall Street Journal, Dow Jones & Company, 5 Feb. 2018, http://www.wsj.com/articles/are-americans-falling-out-of-love-with-chocolate-1517832874.

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